Randy Cabral — President of the Hawaiʿi Farm Bureau (HFB)

Summary

Testimony by Randy Cabral, President of the Hawaiʿi Farm Bureau, dated August 18, 2023, describing the state of agriculture in Hawaiʿi and the challenges its farmers and ranchers face. The testimony states that Hawaiʿi imports approximately eighty-five to ninety percent of its food and has 7,328 farms covering 1.1 million acres generating roughly $563 million. It discusses invasive species, farm labor and the H-2A program, transportation costs, crop insurance and disaster relief, land, labeling, taxation and fees, and the environment. On transportation, it states that the USDA FSA Reimbursement Transportation Cost Payment Program caps reimbursements at $8,000 per year and asks that the cap be increased.

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                             P.O. Box 253, Kunia, Hawai’i 96759
                          Phone: (808) 848-2074; Fax: (808) 848-1921
                              e-mail info@hfbf.org; www.hfbf.org


My name is Randy Cabral and I’m the President of the Hawaiʿi Farm Bureau (HFB). Organized in
1948, the Hawaiʿi Farm Bureau is comprised of 1,800 farm family members statewide, and we
serve as Hawaiʿi’s voice of agriculture to protect, advocate and advance the social, economic,
and educational interests of our diverse agricultural community.

The Farm Bureau is the largest general agricultural organization in Hawaiʿi. We represent our
member's interest in public policy at the county, state, and national levels. We operate as a
trade group for agriculture as the Chamber of Commerce does for businesses.

The Hawaiʿi Farm Bureau is very active in state government. We work closely with the Hawaiʿi
Department of Agriculture and other state agencies, the University of Hawaiʿi’s College of
Tropical Agriculture and Human Resources, the College of Agriculture and Community Colleges,
and with state Legislators to help address issues that affect our members. Issues such as land
use, water, labor, transportation, invasive species, food safety, agriculture theft and vandalism,
research and development, pesticide regulations, transportation, crop insurance, marketing,
and taxes, just to name a few.

Agriculture is a vital component of Hawaiʿi's economy. It provides Hawaiʿi with a stage for
tourism, export products for an otherwise service-oriented economy, a diversity of
employment opportunities and lifestyles for its residents, and stewardship of its lands and
water. Agriculture also provides environmental benefits, such as enviable air and water quality
and recharge of our underground aquifers, and social benefits, such as the preservation of our
rural communities.

However, Hawai‘i’s agricultural industry has undergone a great change. Hawaiʿi’s agriculture
industry was formerly dominated by sugarcane and pineapple. Hawaiʿi’s last sugar plantation
shut down in 2016 and pineapple production has been reduced to a shadow of what it was in
1980. In 1980, pineapple was grown on Maui, Oahu, Lanai, and Molokai with 44,858 acres in
production. Currently, we only have a small number of fresh pineapple growers on Maui and
Oahu covering 4,508 acres.

Hawaiʿi’s agricultural industry has transitioned to a more diversified agricultural model. With
much of the food consumed in Hawai‘i produced elsewhere, there is growing concern about the
state’s high dependency upon outside sources. Hawaiʿi is located approximately 2,500 miles
from the continental United States. As the most geographically isolated state in the country,
Hawaiʿi imports approximately eighty-five to ninety percent of its food. While interest in local
food production is growing, Hawai‘i farmers face keen competition from imports abroad. Today
the vast majority of the food consumed in the Islands is supplied by the U.S. Mainland, which is
Hawai‘i’s chief source of competition.
Currently, Hawaiʿi has an inventory of fresh produce that would supply consumers for no more
than ten days. Ninety percent of the beef, sixty-seven percent of the fresh vegetables, sixty-five
percent of the fresh fruits, and eighty percent of all milk purchased in the State are imported.

There are 7,328 farms in Hawaiʿi covering 1.1 million acres generating roughly $563 million.
Sixty-two percent of Hawaiʿi’s farms (4,525) are defined by the USDA as non-commercial
meaning their gross cash farm income (GCFI) is below $10,000. Twenty-five percent of
Hawaiʿi’s farms (1,823) have an income of $1,000 or less and account for 0.1% of Hawaiʿi's
agriculture revenue. Only 1% of Hawaiʿi’s farms are considered Very Large ($1M and up) and
they represent 63% of the total Hawaiʿi's agriculture revenue. A 2012 University of Hawaiʿi
Study revealed that on average, Hawaiʿi farms suffer a net loss of $20 per acre. Farmers have
razor-thin margins. The average age of Hawaiʿi’s farmers is 60.1 years old.

When we talk about the future of farming in Hawaiʿi, we need to talk about more than just
fruits and vegetables. Milk and other dairy products, eggs and poultry, beef, pork, aquaculture,
sheep, goats, starch, grains, nuts, taro, nursery and cut flowers, seed corn, coffee, and
macadamia nuts are all important crops that deserve and require support. We also need to
increase value–added production such as jams, jellies, juices, and other manufactured products
using local agricultural ingredients.

The Hawaiʿi Farm Bureau envisions Hawaiʿi's agricultural future to be one in which the priorities
for both the private and public sectors include significant amounts of land in profitable
agricultural production, maximum opportunities for export and import substitution, increased
development of new crops and products, and enhanced marketing of both new and existing
crops and products. Landowners, government, and the general population will be aware of the
value and significance of agriculture in Hawaiʿi.

We envision agriculture in the future being increasingly diversified, intensive, and
technologically sophisticated in the recognition of ever-increasing competition and expansion
of regulations intended to protect and preserve our natural environment.

We envision a dynamic private-public partnership in agricultural development. Under strong
leadership, the public agencies will be supportive of agriculture with a focus on research,
information dissemination, market development, and other support services. Production
agriculture will be viewed as an integral part of Hawaiʿi's environmental stewardship. Federal,
state, and county policies and regulations affecting agriculture will be assessed and
streamlined, eliminated, or redefined within the context of helping agricultural businesses
without compromising public or environmental safety and health. In response to the public
sector's recognition of agriculture's role, agriculture will organize itself into collaborative
organizations to improve its competitiveness.
MAJOR ISSUES AFFECTING HAWAIʿI'S AGRICULTURE
The Hawaiʿi Farm Bureau believes that if we want to focus on improving Hawaiʿi's agricultural
industry, we need to assist our farmers and ranchers by addressing the many challenges that
they face:

Invasive Species
Invasive species have become one of the most challenging problems impacting Hawaiʿi. Many
invasive species are damaging Hawaiʿi’s environment and the state’s economy. Agriculture has
a vested interest in this matter. Agriculture is one of the major casualties when invasive species
are introduced. Every year, numerous new pests are introduced into the State, such as the
coqui frog, coffee berry borer, axis deer, macadamia felted coccid, little fire ant, coconut
rhinoceros beetle, small hive beetle, varroa mite, two-lined spittlebug, to name a few.

Global travel and trade make alien pest introductions a threat to local agriculture. Difficulties in
implementing abatement measures point to the need to improve mitigation measures. We
must do a better job protecting Hawaiʿi’s agricultural industries, environment, and the general
public by preventing the introduction and establishment of harmful pests.

Our ports-of-entry biosecurity program is essential to prevent invasive species from entering
the state. The State of Hawaiʿi Plant and Animal Declaration Form helps prevent new invasive
species from entering Hawaiʿi when completed by passengers and flight crews arriving in
Hawaiʿi, but we need broader support from the Federal Government. USDA inspects check-in
and carry-on luggage for outbound passengers from Hawaiʿi, but the State is responsible for
inspections for passengers arriving in Hawaiʿi.

Farm Labor
The average age of a farmer in Hawaiʿi is approximately 60.1 years old. For agriculture to be
sustainable, and to produce more local crops we must cultivate the next generation of farmers
and ranchers. Agricultural enterprises continuously need an adequate supply of a properly
trained labor force. Hawaiʿi's agricultural industry needs to be an entrepreneurial and
competitive industry with a highly-skilled, innovative workforce. As the industry grows, private-
public partnerships need to identify methods to aggressively start and/or nurture the
development of successful agricultural and agriculture-related enterprises. Practical training,
particularly in business and financial management, is critical for many independent farmers
who may lack formal education in these subjects. The shortage of willing and able workers,
affordable housing for farm workers, and competition from alternative employment are several
of the pressing farm-labor related issues that need to be addressed.

Congress created the H-2A program in 1986 to provide farmers with a legal workforce to fill
jobs on a seasonal basis when there is an insufficient number of willing and available U.S.
workers. Many farmers with labor-intensive crops rely on the H-2A program due to the
historical shortage of U.S. farmworkers. An H-2A employer’s labor costs frequently approach
40% or more of their total production costs, and for many of these producers, H-2A labor costs
typically constitute 80 to 90% of their total annual payroll.

Hawaiʿi agribusinesses hired 268 guest workers on H-2A visas at the end of September 30,
2022, 27% higher compared to the same period in the previous year. The gross wage rate at the
high-end range paid to guest workers was $2.99 an hour lower than that for all hired farm
workers. The distribution for H-2A workers employed locally by agricultural classification was as
follows: coffee (80), apiculture (21), livestock (11), general farm workers (155), and
administrative support (1). Many of Hawaiʿi’s small producers simply cannot afford to
participate in the H-2A program.

As the demand for agricultural labor in Hawaiʿi continues to increase, while the availability of
labor decreases and costs for labor increases, farmers and ranchers continue to look for
alternative means to operate their farms through technology, like small equipment tractors. A
limited number of weed management solutions and the increase in labor costs have made
weed management a major challenge for many small farmers in Hawaiʿi. Many small farmers
also require smaller harvesting and field prep equipment that is not readily available in Hawaiʿi.
These growers include vegetable crops, wetland crops, and livestock forage crops. There is a
need to identify high-technology small equipment and evaluate its applicability for Hawaiʿi’s
diverse agriculture systems.

Countries such as Japan have small equipment that is suitable for Hawaiʿi’s small farmers,
however, the engines that are attached to small equipment from foreign countries like Japan
are not in compliance with EPA standard regulations. Hawaiʿi agriculture needs to identify
desired small equipment as well as find solutions that would allow Hawaiʿi farmers to import
foreign equipment that complies with EPA standards.

Transportation
Hawaiʿi's position as the world’s most isolated location, as well as its being a series of islands,
presents a major challenge to the state's agriculture industry. One of the barriers to expanding
agriculture in Hawaiʿi is the cost of transportation. Hawaiʿi is the only state that is 2,500 miles
away from the nearest major port and the only state that is made up of islands. Because of
this, Hawaiʿi’s farmers and ranchers, rely heavily on air and ocean transportation to bring in
agricultural inputs (supplies, equipment, feed, fuel, fertilizer, agricultural machinery, etc) for
their production.

Interisland transportation has been a major issue with neighbor island farmers and ranchers.
The majority of agricultural lands are in the neighbor islands yet the population center is on
Oahu. Neighbor island farmers and ranchers are disadvantaged when competing with fellow
farmers and ranchers on Oahu due to the additional transportation costs of bringing in supplies
and sending products out. Each increase in interisland shipping rates means increased costs to
these farmers and ranchers, costs that usually cannot be passed on to the vendor.

Both ocean and ground transportation is a necessary step for beef and produce to make it to
our plates. Exporting Hawaiʿi’s goods allows us to diversify operations to hedge against
disasters or market disruptions. This allows Hawaiʿi’s agricultural producers to find success both
by providing food to the local community as well as to export markets. While costs rise, it
remains important for Hawaiʿi to continue to produce calves to send to the mainland as it
provides a diversified option for ranchers to manage for drought, lack of feed, or natural
disasters that may negatively affect keeping calves here to grow out. The opportunity to ship
calves to the mainland keeps ranches in business so that when the conditions are ideal for
grass-fed cattle, ranchers are still in operation and can shift to keep more cattle here in
Hawaiʿi.
USDA FSA’s Reimbursement Transportation Cost Payment (RTCP) Program provides some relief
for the high cost of transportation for Hawaiʿi’s farmers and ranchers, but it is currently
nowhere near enough support to provide enough relief to farmers and ranchers. We need the
cap increased to recognize that transportation costs in Hawaiʿi are expensive and necessary.

While costs rise, the RTCP program caps reimbursements at $8,000 per year. Ranches spend
several hundred thousand dollars on ocean freight per year. For example, one ranch spent over
$220,000 on transportation in 2022. The RTCP program reimburses 25% which is based on
COLA. The use of COLA does not appropriately address the need, as the shipping burden for
remote States and Territories is much more than 25% if you consider the average cost per mile
we pay versus the average cost per mile to ship on the Mainland by truck or train. In any case,
the 25% on that example of the $220,000 spent by that one Ranch would be $55,000, except
the cap only allows the rancher to actually receive just $8,000, or 3.6% of costs. In another
example, a ranch spent over $680,000 on transportation. A reimbursement of 25% should be
$170,000, but they actually receive $8,000. This is a reimbursement of less than 1.2%


Crop Insurance and Disaster Relief
Hawaiʿi farmers and ranchers have and will continually have their operations impacted by
natural disasters, global epidemics disease, pests, diseases, high winds, thunderstorms,
hurricanes, fires, floods, earthquakes, lava flow, vog or other volcanic activity, droughts, and
tidal waves. Supply chain issues and other shipping disruptions are also challenging for
agricultural producers. These unexpected disasters can result in devasting economic damage
and emergency financial assistance is critical to help our farmers and ranchers recover from
production and physical losses.

Many of Hawaiʿi’s diversified agriculture producers do not participate in crop insurance policies
offered by USDA Risk Management Agency. Small producers don’t have the educational
exposure or the opportunity to review and analyze the cost and benefit details of the USDA
program, and more local farmers, whether on a large or small scale, perhaps could avail
themselves of a potentially useful risk management tool to protect their crop revenue streams.

Large farms understand and buy crop insurance, however, many small farms don't. They have
risks. Federal crop insurance is well subsidized but eligibility is often a challenge facing local
farmers. Crop policyholders must keep meticulous production and revenue records of their
agricultural enterprises which is difficult for some small producers.


Land
Large tracts of land fallowed by plantation closures on all islands represented a tremendous
opportunity to facilitate the growth of diversified agriculture. These lands are suitable for most
soil-dependent agricultural uses. Constraints to the growth of diversified agriculture are
primarily the availability of arable lands in appropriate lot sizes with the accompanying
infrastructure needed for a successful enterprise.
HFB recognizes recognize that in the land category system used today, agriculture was originally
the catchall land classification and that some lands included within the agricultural district were
not necessarily considered optimal for agriculture.

However, agriculture has significantly evolved. Soil classification is no longer the determinant
of land good for agriculture. Greenhouses, hydroponics, aquaculture, and aquaponics are just a
few of the many types of agriculture that can occur on all classes of land (A, B, C, D, E). Some of
the best floriculture and hydroponic operations in Hawaiʿi are on C, D, and E lands. The total
environment, including rainfall amount and timing, day and night-time temperatures, wind, and
humidity each contributes to whether a particular region is suitable for a specific crop. In many
cases, the soil type and even the existing terrain are not determinative of whether farming can
exist and thrive.

Hawaiʿi Farm Bureau has serious concerns about the pressure to allow non-agriculture uses on
agricultural lands; allowing residential developments to be interspersed with farming
operations often causes problems that can result in the failure of farms. This cannot be
allowed. Because of the pandemic, everyone better understands now the importance of
agriculture in our isolated and vulnerable state. We must protect agricultural lands from well-
known threats and avoid simplistic solutions to Hawaiʿi’s housing problems.

The urgency to address Hawaiʿi’s need for affordable housing, renewable energy, and new
landfills should not be allowed to eliminate Hawaiʿi’s use of productive agricultural land.

Water
Land cannot support agriculture without adequate, economical water resources. Plantation
closures not only made available large tracts of agricultural land but also left behind extensive
irrigation systems such as the Waiahole Ditch, Oahu; the Lower Hamakua Ditch, Big Island; the
East and West Kauai Ditch systems, Kauai; and the Honokohau Ditch on Maui. Unfortunately,
the closures have also left the water collection and distribution infrastructure decaying and
falling into disrepair.

In addition, recent regulatory and court decisions, e.g., those that support leaving water
resources in their natural state rather than developing them for agricultural use, are
threatening these agricultural water sources and systems.

There is a continuous need for an efficient and equitable policy for agricultural water. The
profitability of existing enterprises as well as future expansion and success of the industry rely
on the development of adequate sources of water suitable for irrigation and the allocation of
that water at reasonable rates. Water development programs within the state must be planned
with due consideration for actual and potential agricultural development. Similarly, water
regulations in the state should support existing and potential agricultural development. There
should be a balance between environmental interests and economic benefits.

Incentives are needed to help develop new sources and distribution systems and to maintain
the existing systems. Water development has high capital costs and risks. Joint private-public
development of water sources to serve agricultural production on adjacent and/or contiguous
state and privately owned lands suited for agriculture should be encouraged.
While dam and reservoir safety rules represent an important public safety initiative, the rules
codified in HRS chapter 179D are having an adverse effect by reducing water storage capacity
across the state. At a time when changing weather patterns have demonstrated alternating
periods of drought punctuated by significant storm events, coupled with the noble goal of
achieving food security for our island state, water storage is more critical than ever. The new
rules will discourage new dam and reservoir construction, and in many cases cause dam and
reservoir owners to minimize the capacity or decommission existing storage capability.

Many of the reservoirs – built in an era of plantation agriculture—no longer generate enough
revenue to be economically sustainable. But they are needed in ways few people have yet
imagined. The issue of how to pay for the upgrading and maintenance of this critical
infrastructure is now gaining more attention as the state’s budget comes into focus.

Dams and reservoirs are the keys not just to a future sustainable agricultural system in Hawaiʿi,
but to the entire water and environmental health of the State. In addition to the conventional
benefits of storing and delivering reliable water for agriculture in dry times, wildlife habitats,
flood control during large storms, erosion control, and the reduction of sediment loading on our
nearshore ocean reefs, reservoirs also ensure a supply of potable drinking water (after
treatment) and provide water to help battle wildfires.

Reservoirs also help recharge our groundwater aquifers by capturing stormwater (for later
release) that would otherwise rush to the ocean. There is growing evidence is that there will be
a pattern of fewer, but larger storms separated by longer intervals of drought. If the large
rainfall flows are not captured, overall groundwater recharge may be significantly reduced.
Groundwater is our primary source of drinking water and demand is relentlessly rising. We
already face declining groundwater recharge every time we place hard impermeable surfaces
(e.g. concrete) over previously open ground (agriculture).

Recent Dam and Reservoir Safety rules will levy an additional burden on reservoir owners and
Hawaiʿi farmers. Fuel, labor, equipment, transportation, and other expenses are already higher
in Hawaiʿi than on the mainland, placing locally-grown products at a competitive disadvantage.
Inevitably, increased costs will be passed on to consumers and are counterproductive to efforts
to grow more food in Hawaiʿi. Some landowners will simply decommission their dams, abandon
their reservoir systems and decide what to do with their now-fallow lands when agriculture is
no longer viable.

Research and Development
The University of Hawaiʿi, College of Tropical Agriculture and Human Resources, the Hawaiʿi
Agriculture Research Center, the Hawaiʿi State Department of Agriculture, and the U.S.
Department of Agriculture Pacific Basin Agricultural Research Center must work collaboratively
to expand their research efforts for agriculture with an emphasis on locally produced products.
Priorities lie in the improvement of cultural practices for currently grown products,
development of new crops and value-added products, improvements in processing procedures,
and development of new postharvest systems that improve the transport and handling of
products. New technologies such as biotechnology should be aggressively pursued to provide a
competitive edge to Hawaiʿi's agriculture in the marketplace. Public education is an important
element in the development of any new technology to alleviate misperceptions and fears.
Access to Capital
Farmers and ranchers need capital to succeed. Capital for new farmers to begin. Capital for
farmers to purchase more land and new equipment, hire more labor and expand their markets
so they can grow their businesses. Capital to invest in new Ag Technology to increase their
production and efficiency. However, access to capital remains a barrier for many farmers and
ranchers, especially small producers, in the islands. The scope of financial products available to
farmers and ranchers in Hawaiʻi is diverse, from loans and grants to reimbursements and crop
insurance programs available through the USDA and other federal agencies. However the
demand for affordable capital across the sector far outweighs the supply, and oftentimes
eligibility requirements significantly narrows the number of capital products truly accessible to
producers.

Many smaller farmers, ranchers, and other agricultural operators lack the necessary business
and management expertise to seek out and apply for the various sources of funding available to
them, including funding provided by the USDA and other sources to assist with critical needs
such as infrastructure, technology, equipment, processing, training, market access and
development, and much more.

Food Safety
The Food Safety Modernization Act (FSMA) transformed the nation’s food safety system by
shifting the focus from responding to foodborne illness to preventing it. Foodborne illnesses
can be serious, and we should seek ways to reduce risk. However, many of Hawaiʻi’s farmers
are not FSMA compliant because of the cost and criteria for food safety certification The many
criteria associated with FSMA to be compliant should not impede safe food. Hawaiʻi cannot
afford to further lose farmers as we strive to increase local food production.

Accessing larger commercial and institutional markets that generally require food safety
certification is a challenge for many of Hawaiʿi's farms. The majority of Hawaiʿi’s commercial
and institutional buyers will not purchase produce from farms that cannot provide food safety
and traceability documentation required by the Food Safety Modernization Act (FSMA). These
buyers will import products that cannot be sourced locally to meet their customer's demands,
increasing the State's dependency on imported food. Food safety certification of Hawaiʿi farms
is a critical first step toward FSMA compliance and may lead to increased market access and
opportunities to increase production for these farmers. We need funding to provide training
and support to increase the number of food safety-certified farmers.

Marketing and Competitiveness
Hawaiʿi's small size and isolated location provide challenges to the farmer in the global
marketplace. Local markets are finite. Exports are a necessity. At one time, Hawaiʿi enjoyed the
lion's share of the market for pineapples, macadamia nuts, anthuriums, and other commodities.
Foreign regions with similar climatic conditions began producing the same commodities.
Considerable effort and funds were expended to develop these crops and their markets.
Unfortunately, much of the technological information has been made available to our
competitors, creating formidable foreign competition.

All of Hawaiʿi's agricultural exports must be competitive in the world market. Existing costs of
production require that Hawaiʿi rely on uniqueness, quality, service, and image to be
competitive. Exported Hawaiʿian products must not only be unique but should also be of high
value. The industry must be entrepreneurial, responsive to change, and able to function under
adverse conditions. Many challenges such as trade policies are beyond the farmer's control;
however, the industry needs to find ways to mitigate these barriers.

We must protect Hawaiʿi’s agricultural products from deceptive marketing and misleading
labeling. important agricultural crop from deceptive or misleading labels. Hawaiʿi Geographic
Origins labeling helps protect the quality and authenticity of Hawaiʿi's important agricultural
crops such as macadamia nut, coffee, pineapple, hemp, and mamaki. We must ensure that
Hawaiʿi-grown products are accurately represented in the marketplace.

Taxation and Fees
A basic tenet for government involvement should be to provide policies and incentives that
support and encourage thriving business enterprises. There should be a taxation package that
provides an optimal inducement for entrepreneurs to invest in the transformation of Hawaiʿi’s
agricultural industry. This has the potential to provide key incentives to induce the private
sector, but a favorable taxation package should not be the only incentive to encourage future
agriculture development in Hawaiʿi.

As regulatory burdens on agriculture increase, so do permitting fees as government agencies
strive to be self-sufficient in their costs to do business. Regulatory compliance costs and
permitting fees increase the cost of production and can significantly impact the productivity of
new enterprises.

Environment
Changes in societal concerns about the environment, healthier diet, and food safety require
agriculture to transform its attitudes and practices regarding production, processing, and
marketing. Stewardship practices must be implemented or enhanced to protect the soil, water,
air quality, and even wildlife habitat. Public expectations have prompted farmers to expend
more resources to rethink their crop protection, waste management, and soil conservation
practices. Consumer preferences for diets that focus on health and wellness present
opportunities for market channels and production practices that meet this demand. Farming’s
response to these concerns should take advantage of new market niches.


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